Mothercare Share Discussion Threads

[typo56] 13/7/2018 12:39

Looks like underwriters will be left holding the baby

[typo56] 11/7/2018 13:59

Being a bit pedantic but it's not a rights issue but an open offer. The difference is, if you don't take up the offer you receive nowt for the lapsed entitlement. Pay up, or lose out!

[hooley] 11/7/2018 13:01

Are they closing all the loss-making shops? The overseas franchises are profitable is my understanding. Drastic surgery plus the equity fund raising presumably will transform the financial picture. Perhaps the documents relating to the rights issue should spell-out the position. The underwriters would want to know and existing shareholders should also be given the same facts.

[fenners66] 10/7/2018 22:13

kibtf
10 Jul '18 - 16:34 - 152 of 154

I think the $10m trade partner loan is a $10m loan from a franchisee
to be offset/secured by normal credit terms offered by MTC
to the franchisee for goods purchased by the franchisee under normal trade terms with it.

I don't know if that is a good answer or a poor one !

We are talking about a £10m debt trade owed to MTC
So if this is going to be realised it cannot also have a £10m loan from a Franchisee otherwise one would assume the franchisee gets paid in return. Net nil change to cash flow.

If you meant it was a loan TO a franchisee it would not be trade debt.
If you meant they had £10m outstanding on longer terms to a franchisee - whilst we are being told that the franchises make a good profit and MTC is losing a fortune - then once again I see that as utter management failing.

Maybe I should get around to reading the detailed accounts and see if I can fathom it out.....

[typo56] 10/7/2018 17:17

Wow, that's all a bit 'Sir Humphrey Appleby' to me!

What would the benefit be to the franchisee? I assume simply the interest they'll receive on the loan?

So effectively they're being paid to settle immediatley on up to £10m of their invoices?

[kibtf] 10/7/2018 16:34

I think the $10m trade partner loan is a $10m loan from a franchisee to be offset/secured by normal credit terms offered by MTC to the franchisee for goods purchased by the franchisee under normal trade terms with it.

[typo56] 10/7/2018 16:25

Yes, never make the mistake of thinking you understand a company!

[fenners66] 10/7/2018 13:28

But of course there is a reason why these things are not spelt out - they hope (and I guess to some extent are correct) that the share price is driven by headlines rather than hard detail.

So you say you are going to get £10m - makes a good headline and leaves it to any analyst to try and get answers , and if they don't get answers do they get as much publicity as the original headline ?

So you end up with (say) retail investors buying shares because of the headlines - whilst perhaps the more considered views of professionals are still looking for answers.

I confess with some shares (companies I "trust" ) I do just read the first few pages of RNS's ......

[typo56] 10/7/2018 12:32

I'm not sure they're recovering £10m from subsidiaries. It sounds more like a trade partner has granted them a £10m facility, secured on the debtors, which are almost entirely the subsidiaries!

I hate the way these things aren't spelt out properly. Leaves you the feeling that they're telling you the absolute bare minimum required.

[fenners66] 10/7/2018 11:08

Seems weird that they think they can recover £10m from subsidiaries.

If they can why have they not done so already ? Or is it part of putting Childrens World (is it?) into administration ?

If its just collecting something they should have done already it just adds to the idea of poor management.

[typo56] 10/7/2018 09:30

fenners66, it may not answer your question but the £10m debtor financing was described as a 'trade partner loan".

At y/e Mar 2018 they had debtors for £156.1m (2017 £212.6m), which was nearly all due from subsidiary undertakings.

They state, "Amounts due from subsidiary undertakings are recognised at fair value and repayable on demand"

Also, "The Company has exposure to credit risk inherent in its receivables due from its subsidiary undertakings."

[davidelliott52] 10/7/2018 09:16

I still can't work out why anyone would buy here, even at 19p it looks poor

[fenners66] 09/7/2018 21:58

Terminated - that is not what the language used implies "Cash Realisations" is not we will be a bit more profitable by closing loss making shops

It means literally something will be turned into cash and at the same time when a business talks of generating cash from disposing of something it usually means at a loss but they do get some cash for it.

Anyone read the last accounts to explain the £10m trade debtors ?

[terminated] 09/7/2018 19:22

Come on fenners. Cutting store cuts costs, it's basic cutting loss making shops saves money. It's easy to see how they will increase money short term, the longer term however has many ifs and buts.

[fenners66] 09/7/2018 13:41

"Capital Refinancing Plan"

includes

"working capital initiatives releasing up to GBP10 million from the Company's existing trade debtor balances (the "Debtor Financing"


What ?
It's a retail business - what are they doing having £10m of trade debtors?
If they have, why has no-one collected they £10m before?
That suggest they cannot collect it - or will have to offer discounts etc to get it.

[fenners66] 09/7/2018 13:38

"we expect cash realisations of at least GBP10 million through store closures and other UK and International initiatives within 18 months of the date of this announcement."

How ?

It does not say what they will do to generate this - store closures , have they any freeholds to sell?
Market for them is going to be poor so I would expect a loss on sale if there are any.

[typo56] 09/7/2018 13:36

Punters do realise that shares bought today don't qualify for the 19p open offer?

[loganair] 09/7/2018 09:40

Because the average small Private Investor are mugs and can easily be conned out of their hard earned money by the Oily Smug "honest Ron, honest Ron, the rest are a con" Institutional Investors.

[ltcm1] 09/7/2018 09:32

You would think this was a job for private equity turnaround specialists rather than shareholders putting in a very small amount of cash.

Frankly amazing they can raise money from shareholders given the company's performence over the last five years.

[typo56] 09/7/2018 09:24

Well they're trading ex-open offer this morning and holding up rather well. Wonder how long it will last.